"The third quarter of the year has historically been the roughest on the stock market," notes advisor Kelley Wright, a specialist in dividend paying stocks.

In his IQ Trends newsletter, he notes, "One could argue that a correction and consolidation would be healthy and is long overdue." That being said, he adds, "The opportunity currently exists to acquire high-quality companies with long-term rising dividend trends."

Within this framework, he sees opportunity in two favorite blue chip retailers -- Wal-Mart Stores (NYSE: WMT) and TJX Companies (NYSE: TJX).

He says, "It seems like every summer we hear analysts agonize over weak retail sales from May and June. I've often wondered if any of these folks have heard of the phenomenon known as 'vacation.'"

He continues, "After a long school year with the seemingly never ending number of trips to pick up the dozens of items that the kids absolutely have to have, I know that my wife doesn't want to go anywhere near a store unless it is a medical necessity."

Says Wright, "The calendar cannot be ignored so I suspect that when Uniform Day (as they call it at my kids' school) rolls around in mid-August, parents across the fruited plain will be descending en mass to pick up clothes, shoes and the requisite supplies for another school year. And, he states, "I believe both Wal Mart and TJX Companies will be potential beneficiaries of this impending spending spree."

Wright explains, "Both companies are ranked A+ by S&P for their earnings and dividend quality. In addition, both stock have excellent dividend histories. It is a fortunate circumstance when quality and value intersect with opportunity."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Citigroup Inc. (NYSE: C) is the top conservative investment for 2007 from Kelley Wright. The editor of Investment Quality Trends notes, "I know this company has been public relations-challenged, but let's consider the fundamentals.

"First, it's not only undervalued, it's trading almost 71% below its historic undervalued dividend yield of 2.20%. In dollar terms, the stock can appreciate $37 to $89 and still represent excellent historic value!

"Second, the stock has earned an A+ ranking by S&P for earnings and dividend quality; S&P doesn't hand out an A+ easily. The stock has also earned our 'G' designation, which denotes a remarkable 10% annual dividend growth over the past 12 years. And, the stock has a P/E of 11 and is trading right at 2 times book value; numbers Benjamin Graham would like.

"CEO Charles Prince is feeling the heat on unlocking shareholder value. Based on recent management restructuring, it appears they will attempt to boost earnings by cutting costs and trying to squeeze value from every corner of this far-flung enterprise. At the end of the day though, I think Prince will have to do more and the Street will reward those efforts."

To see Kelley's favorite speculative idea for 2007, click here.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Popular, Inc. (NASDAQ: BPOP) is the top speculative play for 2007 from Kelley Wright. The editor of Investment Quality Trends notes, "We aren't big risk takers. That being said, Popular is an interesting undervalued idea.

"First the numbers: an A+ S&P Earnings and Dividend Quality Ranking; our designation for spectacular annual dividend growth of at least 10% for the last 12 years; a P/E of 12; and the stock is trading at less than 2 times book. The stock's historically undervalued yield is 3.10%. Based on the current dividend of $0.64, that equates to a price of $21, and the stock is trading around $17.50.

"The customer base for Popular is the fastest growing demographic in North America: Hispanics. Popular has found a way to market and deliver banking and other financial products to this group, which has traditionally not trusted financial institutions because of their negative experiences with banks in their country of origin.

"We believe this will not go unnoticed by larger, more established banks in the B of A genre. Even without a buyout by another institution, the stock just needs to climb back to its undervalued area to return approximately 18% before the dividend. While 2006 was a disappointing year for BPOP shareholders, we believe 2007 should be a turnaround year and shareholder patience will be rewarded."

To see Kelly's favorite conservative investment for 2007, click here.

With the top risk-adjusted performance rating among all newsletters for the past 15 years, Investment Quality Trends uses a proprietary dividend-based strategy to isolate value among conservative, blue chip stocks. As part of its service, editor Kelley Wright maintains a "Timely Ten" portfolio, representing his current favorite blue chips.

Just added to "Timely Ten" is Wal-Mart Stores, Inc. (NYSE: WMT). Says IQ Trends, "The company has been everyone's favorite target for scorn. But having divested its European properties and focusing on gaining their banking charter, WMT is positioning itself to make some hay."

"Not unnoticed by us," he continues, "is that the Holidays are quickly approaching and Wal-Mart will definitely pull in their share of revenues. When they get the Feds to grant them their banking charter this company will create incredible earnings."

More background on the Timely Ten: Says Kelley, "Whether you are looking to build a portfolio from scratch, are partially invested and looking to add new positions, or fully invested and in need of some affirmation and hand holding, The Timely Ten presents our top ten recommendations.

To earn its place on the Timely Ten list a stock must meet strict criteria including an unvalued ranking, an S&P dividend & earnings quality rating of A- or better, a P/E ratio of 15 or less, a payout ratio of 50% or less and debt of 50% or less.

Also, to be included, notes Kelley, the stock must have "an exemplary long-term dividend growth record, and technical characteristics on the daily and weekly charts that suggests the potential for imminent capital appreciation."

Steven Halpern is editor of TheStockAdvisors.com, a guide to financial newsletters.